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Technology Stocks : Micron Only Forum
MU 230.24+2.5%3:59 PM EST
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To: Stefan who wrote (47779)8/24/1999 8:09:00 AM
From: Graham C.  Read Replies (1) of 53903
 
Here's a rough ( simplistic ) idea of how chip prices
may vary over time ...

The maximum size of a chip doesn't vary much over time,
so how much you can fit on a chip varies with the feature
size. If the feature size shrinks by 30%, you get twice as
much function per chip. ( 0.5 microns to 0.35 microns, say )

There is a cost associated with moving to a smaller
feature size - this may be relatively small, or it may be
large, depending on how much of the old equipment needs to
be replaced with upgraded equipment. This cost makes the new
chips more expensive initially but the effect wears off
with depreciation and maturity of that production line.

This may or may not be associated with a move to larger
wafers. Same wafer size means roughly same number of chips
per wafer; increased wafer size means 50% - 100% increase
in chips per wafer.

The cost per wafer would increase a little for same size
wafer, or maybe quite a bit for a larger wafer.

The bottom line is you get twice as much 'function' for
only a little more cost, or maybe 4 times as much function
for a moderate increase in costs, apart from the initial
capital investment needed to switch over.

Smaller features => more integration => more function per chip => more revenue per wafer => more profit ( or maybe that should be : more chance of survival )

128 Meg will be more cost effective than 64 Meg once the
initial capital investment is depreciated.
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